Ondo Finance, which already affords tokenized U.S. Treasurys on the Ethereum blockchain, expanded the product to the Polygon community.

The corporate has issued its OUSG token, a tokenized model of BlackRock’s short-term U.S. authorities bond exchange-traded fund (ETF), natively on Polygon as a part of a “strategic alliance,” in line with a press launch Thursday.

The agency additionally plans to convey its upcoming yield-generating stablecoin different, which is a tokenized cash market fund referred to as OMMF, in addition to the Ondo-developed decentralized lending market Flux Finance – pending governance approval – to Polygon, Ondo President and Chief Working Officer Justin Schmidt mentioned in an interview.

The event comes as demand for tokenized variations of conventional monetary devices reminiscent of U.S. Treasurys is rising amongst buyers, as bond yields have surpassed charges in decentralized finance (DeFi) lending markets. Wealth administration agency Bernstein forecast that tokenization of real-world belongings (RWAs) may develop to $5 trillion in market worth within the subsequent 5 years.

Tokenized Treasurys has grown to a $600 million market, with Ondo Finance’s OUSG token claiming a big share of $140 million since its inception in January. Flux Finance, developed by Ondo’s group and ruled by a decentralized autonomous group (DAO) by neighborhood votes, lets buyers take out loans by pledging OUSG as collateral. It has $44 million of complete worth locked on the platform, in line with DefiLlama.

Ondo’s transfer follows asset administration large Franklin Templeton, which made its tokenized Franklin OnChain U.S. Authorities Cash Fund (FOBXX) obtainable on Polygon after releasing it on Stellar in 2021.

Polygon is a layer-2 scaling community of Ethereum that enables customers to transact extra cheaply and quicker than on the mainnet, which is liable to clogging throughout occasions of excessive blockchain exercise, whereas nonetheless counting on Ethereum’s safety.

“Ondo Finance constructing on Polygon is a vital step towards bridging the hole between DeFi and institutional-grade finance,” mentioned Colin Butler, world head of institutional capital at Polygon Labs.